16 June 2025 Arbitration Law >> Business & Commercial Law   |   RERA >> Property & Real Estate  

In Abhay Damodar Kanhere v/s Morya Infraconstruct Pvt. Ltd., a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator due to disputes arising from a 2019 Agreement for Sale. The core dispute revolves around the respondent's alleged failure to provide amenities in the purchased flat in conformity with the agreement. Both parties acknowledge the existence of an arbitration clause (Article 13.2) in their agreement.

The primary objection raised by the respondent is a point of law: that the disputes are non-arbitrable because of a Second Appeal Judgment (October 25, 2024), which stated that disputes falling under the Real Estate (Regulation and Development) Act, 2016 (RERA Act) are not amenable to arbitration. The respondent argues that judicial discipline requires the court to follow this precedent.

However, the court rejects this objection for several reasons:

1. Limited Scope of Section 11: The court's jurisdiction under Section 11 of the Arbitration Act is specific and limited to examining the existence of an arbitration agreement.
2. Arbitral Tribunal's Jurisdiction: Issues of jurisdiction are typically for the arbitral tribunal to decide under Section 16 of the Arbitration Act.
3. Misinterpretation of "Ratio": Crucially, the court clarifies that the "ratio" (the legal principle on which the decision is based) of the Second Appeal Judgment has been misinterpreted. The question framed and answered in that judgment was whether the jurisdiction of RERA is ousted by an arbitration clause, not the converse (whether arbitration is ousted by RERA). The Second Appeal Judgment concluded that an arbitration clause does not oust RERA's statutory jurisdiction, as RERA is a regulatory authority with punitive and remedial powers that cannot be overridden by a private agreement. Any observations in that judgment suggesting RERA's jurisdiction ousts arbitration are considered obiter dictum (remarks not forming part of the binding ratio).

The court further observes that the RERA Act's provisions (Section 88, 89, and 79) indicate that RERA applies in addition to other laws, and its ouster of civil court jurisdiction is specific to matters RERA is empowered to determine. Whether a dispute falls within RERA's purview (e.g., violations of the RERA Act, compensation under specific sections) is a mixed question of fact and law that an arbitral tribunal is capable of determining.

Given these findings, the court agrees that the arbitral tribunal is the appropriate forum to address any questions of ouster under Section 16 of the Arbitration Act.

Finally, the court notes that both parties expressed an interest in attempting to resolve their disputes amicably. Therefore, it defers the effect of the arbitration appointment for six weeks to allow for constructive engagement. If the disputes are not resolved within this period, the appointed arbitrator, Mr. Rohit Joshi, will commence the arbitration proceedings. The order details the arbitrator's contact information and the procedural directions for the arbitration, emphasizing that the order does not express an opinion on the merits of the case.

Section 11, Arbitration and Conciliation Act - 1996  

Section 16, Arbitration and Conciliation Act - 1996  

Arbitration and Conciliation Act, 1996  

Section 79, REAL ESTATE (REGULATION AND DEVELOPMENT) ACT - 2016  

Section 88, REAL ESTATE (REGULATION AND DEVELOPMENT) ACT - 2016  

Section 89, REAL ESTATE (REGULATION AND DEVELOPMENT) ACT - 2016  

REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016